Wall St stalls as investors grapple with Trump’s latest tariff jolt

NEW YORK: The S&P 500 and the Nasdaq struggled for direction on Tuesday, as anxiety over President Donald Trump’s latest tariff salvo overshadowed investor hopes that fresh talks with US trading partners might avert a full-blown global trade war.

At 11:49 a.m. the Dow Jones Industrial Average fell 58.27 points, or 0.13%, to 44,348.09, the S&P 500 gained 1.04 points, or 0.02%, to 6,231.02 and the Nasdaq Composite gained 5.06 points, or 0.03%, to 20,417.57.

Trump warned on Monday that sweeping new US tariffs would hit countries from Japan and South Korea to smaller trading partners starting Aug. 1—though he hinted at possible reprieves if fresh proposals emerged.

The threat sent all major indexes sharply lower at Monday’s close, but they pared some losses earlier in the session on expectations that the economies would possibly work out favorable trade terms through negotiations before Aug. 1.

Japan’s top trade negotiator, Ryosei Akazawa, held a 40-minute phone call with US Commerce Secretary Howard Lutnick on Tuesday, where the two sides agreed to “actively” continue negotiations.

While investors stayed on the sidelines, the Russell 2000 small-cap index managed to eke out gains of nearly 1%.

The energy index jumped 2.2%, while Utilities , often traded as bond-proxies, dropped 1.1%.

In mega-cap stocks, shares of Tesla gained 2.5% after the stock recorded its steepest single-day fall in nearly a month on Monday.

“The pick up in volatility is a reminder of the degree of uncertainty surrounding trade policy,” said Jordan Rizzuto, chief investment officer of GammaRoad Capital Partners.

Rizzuto also noted that the real risk was not knowing when these tariffs will hit consumers.

The subdued mood stands in sharp contrast to the market turmoil that was unleashed by the “Liberation Day” tariff announcements three months ago, which pushed the Nasdaq into bear territory and dragged the Dow and the S&P 500 into correction.